���������ֳ�

Overarching Drivers: Turkey’s rating reflects its weak external finances, economic volatility, high inflation, and geopolitical risks. Set against these factors are its large and diversified economy, favourable GDP per capita, and moderate levels of government and household debt. Economic growth is recovering strongly, inflation has fallen from 20% at the beginning of 2019, the current account has improved and external risks, although still high, have eased, supported by the real effective exchange-rate adjustment and private-sector deleveraging. ‘V-Shaped’ Recovery: ���������ֳ� forecasts GDP growth of 3.9% in 2020 and 4.0% in 2021, underpinned by the lower interest rate, a sharp pick-up in credit, and the relative resilience of the banking and corporate sectors to the 2018 crisis. There is a more conducive backdrop for implementing structural reforms, although so far there has been limited progress. There is a risk that policy settings result in a build-up over time of unsustainable credit growth and greater external imbalances, particularly if reform progress remains slow. External Weaknesses: Turkey’s large external financing requirement remains a source of vulnerability, but has declined to around USD170 billion from USD211 billion in 2018 driven by current account adjustment. Turkey’s weak monetary policy credibility, the sharp reduction in the real interest rate from 8.3% in June to -1.6% and our expectation that inflation will remain relatively high, together with the economy’s susceptibility to shocks and the potential for less supportive global financial conditions, increase risks of renewed market volatility.